SENATE BILL REPORT

SB 6643

BYSenators Lee and Moore

Amending business and occupation tax deductions.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 8, 1988

Majority Report:  That Substitute Senate Bill No. 6643 be substituted therefor, and the substitute bill do pass.

      Signed by McDonald, Chairman; Craswell, Vice Chairman; Bauer, Bluechel, Cantu, Deccio, Fleming, Gaspard, Hayner, Johnson, Lee, Newhouse, Saling, Smith, Williams, Zimmerman.

Senate Staff:Gary Benson (786-7715)

                  February 9, 1988

AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 8, 1988

BACKGROUND:

The Business and Occupation tax (B&O) applies to all income unless specifically exempted.  Certain organizations have been under the impression that they do not need to register with the state nor do they need to pay B&O taxes.

All persons who engage in any business or perform any act upon which a tax is imposed is to register with the Department of Revenue.  Late tax payments are subject to interest and penalties.  The statute of limitation is for four years unless the tax payer has not registered.

SUMMARY:

Charges made to members of a trade organization for occupying space at trade shows or participating in other activities sponsored by the organization is exempted from the B&O tax.

EFFECT OF PROPOSED SUBSTITUTE:

If a nonprofit trade or professional organization registers with the Department of Revenue by July 1, 1988, they are granted amnesty on B&O taxes owed on income earned prior to the effective date of the act or the date of registration whichever comes earlier.

Appropriation:    none

Revenue:    yes

Fiscal Note:      requested February 8, 1988

Effective Date:The bill contains an emergency clause and takes effect immediately.

Senate Committee - Testified: John Woodring, Pacific NW Apparel Association (for); Michael McAuliff, Pacific NW Apparel Association (for); Harris W. Sprincin, Pacific NW Apparel Association (for); Mark Allen, Washington Society of Association Executives (for); Lynn Melby, Washington Society of Association Executives (for); John Plymyer, Washington Society of CPAs (for); Don Taylor, Department of Revenue